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Murky future for auto rescue amid GOP opposition

A House-passed bill to speed $14 billion in
loans to Detroit's automakers stands on shaky ground in a
bailout-weary Congress, undermined by Republican opposition that
could derail the emergency aid in the Senate.

Republicans are challenging lame-duck President George W. Bush
on the proposal, arguing that any support for the domestic auto
industry should carry significant concessions from autoworkers and
creditors and reject tougher environmental rules imposed by House
Democrats.

The House approved the plan late Wednesday on a vote of 237-170.
It would infuse money within days into cash-starved General Motors
Corp. and Chrysler LLC. Ford Motor Co., which has said it has
enough cash to make it through 2009, would also be eligible for
federal aid.

Supporters cited dire warnings from GM and Chrysler executives,
who have said they could run out of cash within weeks, and concerns
that a carmaker collapse would erase tens of thousands of jobs and
jolt an already bleak economy.

Democrats and the Bush White House hoped the Senate would vote
on the legislation as early as Thursday. But based on concerns
raised by GOP senators - and a still-uncertain level of support
even among Democrats - they had a lot of work to do.

A leading Senate Republican opponent said Thursday that he
cannot back spending $14 billion of taxpayer money on a plan that
would call for a restructuring of the industry, but which fails to
detail just how that would be accomplished.

"I think that is putting the cart before the horse and isn't
reponsible in terms of tax dollars," Sen. David Vitter of
Louisiana said on CBS's "The Early Show."

The measure's murky outlook reflected the difficulty of
approving another federal financial rescue on the heels of the
deeply unpopular, $700 billion Wall Street bailout, as the clock
ticks down on the current Congress and Bush's influence is at a low
ebb.

"People realize that this bill is an incredibly weak bill (and)
is the product of an administration that wants to kick the can down
the road and let somebody else deal with it," said Sen. Bob
Corker, R-Tenn.

Even Republicans representing states with automobile plants said
the proposal was far from ideal. Sen. Kit Bond, R-Mo., whose state
is home to five auto plants, said he wanted to see changes. Sen.
George Voinovich, R-Ohio, said the bill lacked the necessary
Republicans to pass the Senate.

The measure would create a government "car czar," to be named
by Bush to issue the loans, empowered with the ability to yank back
the loans and force the carmakers into bankruptcy next spring if
they fail to cut quick deals with labor unions, creditors and
others to restructure their businesses and become viable.

Opposition wasn't limited to Republicans.

Democratic Sen. Max Baucus of Montana is opposing the measure
because of a provision to bail out transit agencies that were
involved in transactions now considered unlawful tax shelters.

Under the House-passed bill, the carmakers would have to submit
blueprints on March 31 to the industry overseer showing how they
would restructure to ensure their survival, although they could be
given until the end of May to negotiate with the government on a
final agreement.

The automakers initially asked Congress for $25 billion, then
returned two weeks later to plead for as much as $34 billion. But
with the White House refusing to dole out new spending for the Big
Three, congressional Democrats agreed to use an existing program
that was to help carmakers retool their factories to make more
fuel-efficient cars.

That fund yielded only $15 billion in emergency loans, and when
negotiators agreed to leave some money in the environmental
program, the amount fell to $14 billion.

Democrats agreed to scrap language - which the White House had
declared a deal-breaker - that would have forced the carmakers to
drop lawsuits challenging tough emissions limits in California and
other states. But they kept a provision to force the automakers to
abide by those states' limits - a kind of consolation prize for
environmentalists, who already were livid at the raid of the
fuel-efficiency program.

Senate Democrats unveiled a nearly identical measure that
omitted the requirement, but that bill still faced long odds.

The Bush administration is expected to work with President-elect
Barack Obama's team on choosing the industry czar. The overseer
would have say-so over any major business decisions by the
automakers while they were taking advantage of federal aid, with
veto power over any transaction of $100 million or more.

The measure also would attach an array of conditions to the
bailout money, including some of the same restrictions imposed on
banks as part of the $700 billion Wall Street rescue. Among them
are limits on executive compensation, a prohibition on paying
dividends and requirements that the government share in future
profits and taxpayers be repaid before any other shareholders.

Also included in the bill is an unrelated pay raise for federal
judges.